Policy Solutions

Low-Carbon Fuels

Low-GHG Fuels for High Temperatures
Manufacturing

Biofuels, hydrogen, and other electrofuels derived from clean electricity can provide heat for manufacturing processes and replace conventional fossil-derived fuels. These low-GHG fuels are important in applications for which electrification is too costly or which require very high temperatures.

While many alternative fuels exist today, they are not yet commercially competitive at scale. We need policies that can drive investment in the production of low-GHG fuels, improve air quality, reduce costs, and accelerate the rollout of new technologies.

Market Challenges

  1. Technological Limitations

    Though pathways to produce synthetic liquid fuels and biofuels exist today, technologies to produce low-GHG liquid fuels are still in development and not yet to scale. These technologies rely on processes still in their early stages such as producing low-GHG hydrogen and high-temperature heat as well as synthesizing advanced biofuels. All these technologies require more research and development before becoming commercially available at scale.

  2. Supply of Feedstocks

    Increasing the total supply of sustainable biomass will require a large-scale expansion of dedicated cellulosic energy crops such as switchgrass, miscanthus, and short-rotation poplar. By one estimate, even if all the world’s grassland was converted to energy cropping, only around 15 percent of world energy requirements in 2050 could be replaced with biomass. Expanding the supply of waste feedstocks is not viable either because the supply of used cooking oil, animal fats, tall oil, and palm fatty acid distillate (PFAD) is relatively fixed and limited. The use of forest residues or forest woody biomass is another option, especially in North America and in parts of Europe, though there is significant regional variability in the timing and availability of wood waste.

    Low-carbon synthetic fuels rely on a different type of “feedstock”: low-cost, zero-carbon electricity. As such, the current lack of consistent and sufficient supply of renewable energy is also a barrier to economically viable synthetic hydrocarbon fuel production. For now, production costs remain significantly higher than fossil fuels.

  3. Cost Barriers

    Advanced biofuels remain considerably more expensive than fossil and food-based biofuels. This is especially true for aviation and marine fuels, two of the most important markets to crack. Low-GHG synthetic fuels are also early in their deployment, making their costs much higher than conventional liquid fuels as well.

Technology Innovation Examples

Phases of Technology
Research and Development
Validation and Early Deployment
Large Scale Deployment
R&D
Validation
Scale

Low-GHG hydrogen is an alternative fuel or feedstock that can be attractive for a wide range of applications. Produced cheaply and without the co-production of CO2, hydrogen has the potential to revolutionize almost every emissions-intensive industry on earth, from fuels to fertilizers and steel to cement. Hydrogen also offers energy-storage capabilities, which can help variable renewable sources (such as wind and solar) capture a larger share of the electricity market.

Recent technical breakthroughs and the changing nature of zero-carbon electricity production offer a plethora of new approaches to the production of “green” hydrogen, including thermochemical, electrochemical, and geologic (mined) hydrogen-generation technologies. Low-GHG hydrogen can also be produced via traditional natural gas steam methane reforming if the resulting CO2 is captured, a process referred to as “blue” hydrogen.

Low/Negative-GHG Hydrogen
Low-GHG hydrogen has the potential to drastically reduce emissions from a variety of industries as a fuel or feedstock, as well as from the transportation and power sectors.

Low-Carbon Fuels Policy Recommendations